From 7 December, three million UK customers will face a yearly increase of £122 on their energy bills after EDF Energy announced a 10.8 percent price increase – five times higher than the rate of inflation.
The announcement comes just weeks after British Gas, Scottish Power, and npower announced tariff increases of 6 per cent, 8.7 per cent, and 9 percent respectively. EDF’s price hike is the highest imposed by any energy company this year.
E.On remains the only supplier of the “Big Six” yet to announce price rises after pledging earlier in the year to maintain residential pricing rates in 2012. However, they are expected to announce price increases earlier 2013.
Providers have blamed their price hikes on a combination of rising costs in the use of gas and electricity networks, mandatory energy efficiency schemes and general increases in the price of wholesale energy.
As winter fast approaches, rising prices are forcing consumers to ration their energy usage despite the cold, fuelling arguments that energy providers are behaving irresponsibly.
Tomorrow, pensioners are expected to protest at Westfield shopping centre in Stratford, East London, to raise awareness of the impact of recent tax hikes upon fuel poverty.
A spokesman of Fuel Poverty Action, the group organising the protest said:
“People are fed up with our energy being produced to line the pockets of the ‘big six’ while we’re left to suffer mammoth fuel bills and escalating climate change. Saturday’s protest, led by pensioners, will be the first of many. Expect a winter of resistance”.
Another blow to consumers is likely to come as price hikes are expected to produce added inflationary pressure on the economy, despite inflation rates easing earlier this month to their lowest since november 2009.
The highly contentious nature of year-on-year price increases from energy providers has prompted extensive political debate. In a blog post for moneysavingexpert.com, Prime Minister David Cameron voiced his concern over the recent price hikes:
“These price rises couldn’t come at a worse time for consumers who are already feeling the pinch from rising petrol prices and the cost of the weekly shop”.
Earlier this month, Ofgem unveiled plans to ensure that providers offered the cheapest tariffs available to their customers to avoid unnecessary over-charging. More details will be outlined in the Energy Bill in the next few weeks.
Shadow energy secretary Caroline Flint MP, on the other hand, said that Labour would dissolve Ofgem altogether:
“The time has come for a complete overhaul of our energy market”
“We need a One Nation government to break the dominance of the energy giants, protect vulnerable customers from being ripped off, and create a tough new energy regulator with the power to force energy companies to pass on savings to consumers”.